Is Australia over-governed and who got us in this mess? In the build up to each state and federal election or budget night we are bombarded with promises of red tape reduction, leaner and more efficient government. If you subscribe to the conservative government view then this is all the fault of the more left leaning (Labor and Greens parties) who are criticised for creating a bloatead bureaucracy that invents needless red tape which in turn stifles business productivity. The counter argument goes along the lines that the conservatives (Liberal-National coalition) are mean spirited and anti-family because they recklessly sack hoards of government employees in their approach to creating smaller government. The underlying assumption is that we are over governed and have too many bureaucrats in Canberra.

By all the rhetoric one would assume that the federal government employee numbers had grown out of all proportion in recent decades. I was curious about this red tape reduction talk and decided to have a look at the basic underlying employment figures for the federal government. I firstly was curious to see how out of hand the number of bureaucrats had gotten and secondly to see what this huge difference in philosophy between the major parties looked like in terms of sacked or hired government staff.

By way of a little background. The Australian Federal government commenced in January 1901 when the six states of Australia agreed to federation. There was a period relative fluidity in the membership and structure of the major political paradigms for the first 15 years, then the extraordinary times of the first and second world wars. I have collated data from 1948 covering the relatively stable post World War 2 period.

Figures for the federal public service employee numbers are drawn from a collation of different sources . In order to allow comparison of the numbers through time, I have converted them to a percentage of the Australian population (using Australian Bureau of Statistics historical population data). It seems that the federal government public service has employed up to 1.7% of the Australian population (1968) and down to 0.57% (2000) (Figure 1).

Figure 1: Australian Federal Government employees as a percentage of the total population.

Since the mid 1990’s about 0.6-0.8% of the Australian population has been employed in the federal public service. That seems reasonable to me, especially when you compare it to the USA with a similar system of federal, state and local governments where about 16% of the population is employed by government, and of that, about 2% of the population is employed by the US federal government .

So, are we over governed? For many the answer to this question is always going to be yes irrespective of how small government becomes. So to give these people some comfort, just remember that it could be much worse, we have about half the relative size of federal government as the leader of the free world.

Which political party runs the leanest government?

The second part of my question – which political party runs the leanest government? – is pretty clear in Figure 1; neither! The Keating Labor government cut the federal public service by about 9% in 1995. The Howard coalition government continued the trend in its early years (1996-2000) by reducing the federal public service by a further 24 % over five years (from 146,000 to 110,000), but then reversed the trend by increasing it to 155,000 by 2006. The federal public service had a slight drop through the Rudd/Gillard years (2008-2013). The first year of the Abbott coalition government (2013-2014) saw a drop of about 5%.

Rather than a plague of bureaucrats, Figure 1 shows that we are near record low levels of federal government employees. Hats off to the public service employees who despite getting roundly criticised by pretty much everyone, including their bosses, still manage to keep the machinery of government running.
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